Bills Digest no. 86 2006–07

Private Health Insurance Complaints Levy Amendment Bill 2006

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

Passage History

The purpose of
this legislation is to amend the Private Health Insurance
(Complaints Levy) Act 1995 to update definitions resulting from the
replacement of the National Health Act 1953 by the proposed Private
Health Insurance Act.(1)

This is one of four Bills reimposing existing
levies on private health insurers. This Bill was introduced as part
of a suite of legislation to reflect the new regulatory regime
detailed in the accompanying Private Health Insurance Bill 2006. On
7 December 2006 the Senate referred the suite of Bills to the
Community Affairs Committee, for inquiry and report by 26 February
2007. The Committee intends to hold a public hearing in Canberra on
2 February 2007.

Separate Bills are required for each levy
because they could be construed as imposing a tax and section 55 of
the Constitution requires that such Bills deal with one subject of
taxation only .

The complaints levy is currently authorised
under the National Health Act 1953 and is a levy on
registered health benefits organisations (renamed private health
insurers under the proposed Act) based on the number of
contributors to the health benefits fund. The levy finances the
administrative costs of the Private Health Insurance
Ombudsman.(2)

The Bill provides that authorisation of the
complaints levy be transferred to the Private Health Insurance
Act 2006 and provides that the rate of the levy be set in
regulations, within a maximum limit specified in the Bill itself.
The Bill proposes a small increase in the maximum limits specified,
which have not been changed since the Act was passed in 1995.

The Schedule replaces a number of definitions
to reflect the replacement of the National Health Act 1953 with the
Private Health Insurance Act 2006; these new definitions are
described in the Explanatory Memorandum. Broadly, the changes to
definitions reflect the new terminology under the new Act.

Items 7 and 8 repeals
sections 5 and 6 and replaces these with new sections imposing a
complaints levy on each day as specified in the yet to be released
Private Health Insurance (Complaints Levy) Rules.

Item 8 provides that the rate
of the levy be based on the number of complying health insurance
policies on issue, in line with the proposed Health Insurance
Act2006; previously this rate was based on the
number of contributors. This item also increases the maximum rate
of the levy from 25 cents per quarter to 50 cents a quarter where
one person is insured; and from 50 cents to $1 a quarter for all
other policies.

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